Whether you call it the Third Industrial Revolution or the Fourth, the increasingly automated Internet of Everything is indeed a revolution, and communications service providers are uniquely positioned for success, as Dawn Bushaus explains.

Best-selling author and economist Jeremy Rifkin contends that we are in the midst of the Third Industrial Revolution, which is pushing us toward a near-zero marginal-cost society – that is, one in which goods and services are traded basically for free. Napster pioneered peering technology at the turn of the century, and now we exchange music, information, news and other data online often at no cost. As robotics, automation and artificial intelligence continue to push the costs of producing and delivering goods lower, eventually we could also exchange them (or produce them ourselves) at little or no cost.

“A growing legion of prosumers is producing and sharing information, not only knowledge, news and entertainment, but also renewable energy, 3D printed products and online college courses at near-zero marginal cost on the collaborative commons,” Rifkin writes. “They are even sharing cars, homes, clothes and tools, entirely bypassing the conventional capitalist market.”

Rifkin points to three defining technologies for the Third Industrial Revolution: communications in the form of cloud, virtualization and billions of connected devices; new renewable power sources like solar and wind; and transportation, which is undergoing radical change as it becomes more connected to the Internet (think Uber) and more automated (think Google Car). Development of the hyper-connected sharing economy will cause a temporary surge in productivity worldwide as energy grids and other infrastructure are modernized.

“This Internet of Things platform gives us 40-year breathing time as we automate,” Rifkin says. “There will be one last surge of mass employment in every category.”

The 4th Industrial Revolution

Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), talks about the same trends as Rifkin, but he says we are embarking on the Fourth Industrial Revolution, arguing that development of the Internet was revolution number three and that the next is separate and distinct – and unlike any we’ve ever experienced.

“There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact,” Schwab writes. “The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace.

“Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”

Seizing the opportunity

No matter what you call it, it’s clear that things are going to get interesting once we’ve completed this massive digital transformation. According to Rifkin, Schwab and other economists, we will be left with an automated capitalist market that operates at low marginal cost and is run by analytics and small workforces.

“An increasingly streamlined and savvy capitalist system will continue to operate at the edges of the new economy, finding sufficient vulnerabilities to exploit, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player,” Rifkin says.

This represents a huge opportunity for communications service providers. They are uniquely positioned to become aggregators in the IoE because they own networks and have trusted relationships with end customers, which includes control of terabytes of data about them and their online activities.

To capitalize on their fortunate positioning, service providers must do two things: embrace automation – not just in their networks but also in operational and business support systems (OSS/BSS) and business processes – and develop digital ecosystems of partners, not only to better deliver what their customers want but also to share expertise and even talent.

This article first appeared in Perspectives 2016. Download the full report now, free. What's next for smart cities, IoE, big data, NFV and more.

Embracing automation

Moving the network and operations to the cloud is crucial, and automation will be key in managing these clouds. Latency requirements for the IoE applications driving 5G (such as, operating autonomous vehicles at scale) are for 2 milliseconds round-trip between a data plane and control plane function hosted in a cloud. That means no time for any sort of human interaction.

Yet, some of the service providers experimenting with network functions virtualization (NFV) and software-defined networking (SDN) have expressed reservations about completely foregoing manual processes when, for example, deciding how to analyze and then act on a deluge of performance data. Their primary fear is that some data may be lost and responses to outages not enacted as required, which will compromise the five nines of reliability they guarantee (something that, by the way, is also necessary in the example of the autonomous vehicle).

There is also personal fear among network engineers that they are being automated out of their jobs. For decades, network operators have dispatched technicians to install equipment at customers’ locations and at network sites. They also have managed performance of and changes to their networks largely manually.

Adopting NFV and SDN requires embracing a completely new way of doing business. In the near term, this doesn’t necessarily mean workforces will be reduced, but the jobs people do will be different. Network engineers and technicians will have to be re-educated and retrained to perform jobs that are more software-oriented.

The future of jobs

In conjunction with its annual meeting in Davos, Switzerland, in January, the WEF released a report entitled The Future of Jobs, which reinforces this idea. The report is based on a survey of 371 of the world’s largest global employers in 11 industries.

“Combined together, net job growth and skills instability result in most businesses currently facing major recruitment challenges and talent shortages, a pattern already evident in the results and set to get worse over the next five years,” The report states. “The question, then, is how business, government and individuals will react to these developments.”

The WEF urges businesses to take an active role in supporting their current workforces through re-training and suggests collaboration to create larger pools of skilled talent will be required. Retraining “will become indispensable, as will multi-sector skilling partnerships that leverage the very same collaborative models that underpin many of the technology-driven business changes underway today,” the report states.

Collaborating for skills

While most businesses realize they need to invest in reskilling current employees, leveraging collaborative relationships for jobs does not appear to be a high priority today (see Figure 1).

Only 10 percent of ICT companies surveyed said they had plans to collaborate for skills within or across industries. Interestingly, the healthcare industry, an important partner for communications service providers, had even less interest, with zero companies indicating plans to collaborate across industries for talent. This is something all companies will have to address given the severe shortage of skills predicted.

In ICT, talent collaboration is already happening in the open source community. Speaking during a webinar update about Open Platform for NFV, Heather Kirksey, Director of the group said: “Think about how many developers have built so much code. If you as a siloed company were trying to tackle all that on your own, when would you be ready to come out with a product? No company could hire as many talented developers as you can get coming into a cross-company project.”

TM Forum’s collaboration community could be another excellent place to figure out how sharing skills can work. What are the best practices for sharing talent among the members of a digital ecosystem? What kinds of business processes and agreements are necessary to facilitate sharing while protecting individual members’ interests? Perhaps a future Catalyst project will answer questions like these.

“In the end, it all comes down to people and values,” the WEF’s Schwab writes. “We need to shape a future that works for all of us by putting people first and empowering them. In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to ‘robotize’ humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature – creativity, empathy, stewardship – it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails.”

About The Author

Dawn Bushaus began her career in technology journalism in 1989 at Telephony magazine, which means she’s been writing about networking for a quarter century. (She wishes she didn’t have to admit that because it probably gives you a good idea of how old she really is.) In 1996, Dawn joined a team of journalists to start a McGraw-Hill publication called tele.com, and in 2000, she helped a team at Ziff-Davis launch The Net Economy, where she held senior writing and editing positions. Prior to joining TM Forum, she worked as a freelance analyst for Heavy Reading.

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